All Forum Posts by: Robert Adams

To go back to the original post topic the government and fed have decided to save SVB and few others in similar situations.

The fed has been aggressively raising rates as we all know. At one point they even discussed how aggressive that they have been and that they will continue until they see inflation under control or until something within the system breaks and forces them to pivot.

I believe the new bank failures are just that, historic record breaking rate hikes have caused new problems within the system and these bank issues are a prime example of that.

Now the question is will the Fed try to band aid those new issues so it can continue the larger fight of battling inflation? Meaning bail out these banks so it can keep raising rates or will it start to slow or even stop rate hikes and hold for a while to let the dust settle within the system which will in turn put a damper on the decreasing inflation rates.

The Fed up until now was solely focused on raising rates and bring down inflation. Now the act of juggling multiple problems begins.

Quote from @Ryan MacArthur:

Hello everyone my team and I are venturing into Las Vegas area and looking to connect with people in the area to find small multifamily or sfh to invest in. Preferably off market stuff. Looking forward to meeting and connecting with you!

 Pleasure to meet you! Welcome to BP and Vegas! Please tell us more about your strategy with those property types and what areas you are needing help with . BP has a ton of great people and info so I am sure you can get answers to most of what you are looking for here. Reach out anytime if I can be of assistance. Best of luck!

@Joe Fermin @Jasmine Joseph welcome to both of you!

What questions do you have so far? Let's see how we can all help get you going in the right direction!

There is a wealth of info and a great network on here so leverage that to get to where you want to be. If I can help with anything reach out anytime.

@Robert Willard hope all is well!

Have you considered transferring the 401k to a Self Directed account and buy the property within that entity?

In regard to deals being had in Vegas the most defintely are. I am currently using funds from a self directed IRA to flip a SFR in Green Valley after just closing another flip in 89015 Henderson earlier this year with those same funds. You can flip with self directed or use it to buy and hold. You can't self manage buy and holds with self directed funds though.

I 1000% agree with Kevin about his remarks of analyzing deals based on mls data may not seem like good deals but by putting offers in front of the seller with numbers that are a good deal for you is how you find sellers willing to entertain what you deem to be a good deal.

In regard to the unemployment numbers I would add that if unemployment were to go up inflation would come down and so would interest rates and then all the pent up demand that is waiting for rates to drop would jump back into the market that already has low inventory and the housing market wouldn't decline. Even if those that are unemployed couldn't  buy the others that are employeed would still drive enough demand to push the limited inventory we have.

What are your goals? Start witht that and then build and investment strategy around that. Then identify properties that may fit that strategy. Then work with an agent to thoroughly analyze the numbers to make sure it fits your strategy. Remember you can spend too much time analyzing a deal and lose it before you have it in contract. So if it roughly fits lock up the deal then do a deeper dive once in escrow within your due diligence period.

Vegas is fully of opportunity and as mentioned by Bill it is a very landlord friendly market.

Quote from @Joel Bongco:

@Robert Adams - You are spot on with your observations. We are experiencing many of your listed points in Hawaii. We have pivoted our REI business in a few ways.

1. Using a 50-60% rule to be ultra conservative. IS THIS IN REGARD TO CALCULATING CASH FLOW?

2. We have an increasing number of Short Sales in our pipeline. HOW MUCH HAS YOUR MARKET DECREASE SINCE THE PEAK? WHAT ARE YOU SEEING AS THE TYPICAL TIMEFRAME IT TAKES TO CLOSE THESE SHORT SALES? ARE THE LOSS MITIGATION DEPARTMENTS STREAMLINING THE PROCESS FOR YOU?

3. Consistent number of Subto deals from a Creative Acquisions perspective. WE ARE SEEING THIS A LOT AS WELL. SEEMS PEOPLE ARE PREFERRING SUB TO OVER ASSUMPTIONS IN MOST CASES. I SEE SEVERAL BENEFITS THIS ROUTE BUT I ALSO SEE THE THE RISK OF THE DUE UPON SALE CLAUSE (ALTHOUGH I HAVE NEVER SEEN A BANK ACTUAL USE IT IN A SUBJECT TO SCENARIO, HAVE YOU?). 

4.  Buying interest rates down for buyers. WE HEAR ABOUT THIS A LOT BUT ONLY USE IT SOME TIMES. THE PERMANENT BUY DOWNS ARE SO EXPENSIVE AND THE 3.2.1 AND 2.1 BUY DOWNS ARE BASICALLY PREPAYING THE SAVED INTEREST. WHAT WE SEE MORE OF IS BUYERS CHOOSING A LENDER THAT WILL GIVE A CURRENT RATE, GET A BIGGER PRICE REDUCTION OR CLOSING COST CREDIT AND THEN HAVE THE LENDER DO A NO COST REFI LATER IF RATES COME DOWN. THIS WAY THEY ARE LOCKING IN A LOWER PRINCIPAL AMOUNT OR KEEPING MORE CASH IN THEIR POCKET BY NOT PAYING CLOSING COSTS AND THEN PLANNING ON GETTING A LOWER RATE LATER W THE NO COST REFI. 

5. Giving some of our margin away to sellers -  People before Profits HELPING PEOPLE AND PAYING IT FORWARD IS NEVER A BAD THING

6. Banks are super aggressive in foreclosures (including in Judicial Foreclosure States like Hawaii) IS THAT BECAUSE MORE PROPERTIES HAVE A LOT OF EQUITY THERE? MOST OF THE REO'S HERE ARE VERY FIRM ON PRICE ONCE IT HITS THE MARKET. THEY WANT OFFERS WITHIN $5K OF ASKING. OTHERWISE THEY LET IT SIT AND WILL DO PRICE REDUCTIONS EVERY 30 DAYS, USUALLY IN THE AMOUNT OF $10K. THEN THEY SIT UNTIL THEY GET AN OFFER WITHIN $5K AGAIN....AND SO ON.

HTHS! 

Joel

Investment Info:

Condo fix & flip investment in Henderson.

Purchase price: $140,000
Cash invested: $155,000
Sale price: $189,999

Sold this one for about $28k+ profit.

What made you interested in investing in this type of deal?

I have flipped several in this community pior so I knew the proeprty and area well. I knew I could sell it quickly because it was the cheapest remodeled condo in all of Henderson at the time I listed it.

How did you find this deal and how did you negotiate it?

MLS quick cash close.

How did you finance this deal?

IRA cash

How did you add value to the deal?

full remodel

What was the outcome?

Sold for a profit

Lessons learned? Challenges?

moving quickly in a declining market and selling at a low affordbale price before it loses more value

As we all know the market has shifted a great deal over the last 6+ months. 

-Fragmented local markets, in regard to supply and demand as well as appreciation and depreciation rates

-Assumable and "subject to" loans

-Demand and inventory fluctuations

-Fed rates and Mortgage rates

-Increased NODs

-Softening rental rates

-New loan programs 

-Seller's giving concessions

How have you pivoted? What investment strategy has been working well for you with the new market conditions?

I am in the Las Vegas / Henderson market primarily and would love to hear about your wins and/or challenges.

Quote from @Katlynn Teague:

Hey @Robert Adams I am a licensed agent as well as a wholesaler here in Atlanta. I work for NetWorth Realty of Atlanta. I love working with investor friendly agents, not to help me find deals but for me to help you find your clients a property. Obviously every wholesaler has different ways they like to work. It's all about vetting these people before you go and find a property for them! 

Happy Friday! I’m familiar with networth I’m on your Vegas buyers list.

We definitely get the wholesalers as much as possible but still seems to be a waste of time. I have exhausted everything I could think of to improve the process so I’m hoping to find a solution from others. Thank you for chiming in and trying to help. 

Quote from @Eliott Elias:

Wholesalers are the key to good deals, most are new and can't find a deal to save their life, doesn't mean they can't be good deal finders in 3 months. Keep the relationships and continue to get deals sent to you by them. 

I am not referring to buying deals from wholesalers, but rather wholesalers reaching out to us to help them find deals. We do are able to help them find the deals but then they are unable to find end buyers and the deals fall apart wasting both their time and ours.